Percent of Sales Method At the end of the current year, Accounts Receivable has

Question

Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $725,000; Allowance for Doubtful Accounts has a credit balance of $6,500; and sales for the year total $3,260,000. Bad debt expense is estimated at 3/4 of 1% of sales.

1. Determine the amount of the adjusting entry for uncollectible accounts.
$

2. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

3. Determine the net realizable value of accounts receivable.
$

Explanation / Answer

1. Determine the amount of the adjusting entry for uncollectible accounts. $ 24450 2. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ 3985000 Allowance for Doubtful Accounts $ 30950 Bad Debt Expense $ 24450 3. Determine the net realizable value of accounts receivable. $ 3954050

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